NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In

Advertisement
Advertise with NZME.
Home / Business

Big Read: Auto industry cries foul as Donald Trump moves toward car tariffs

By Paul Wiseman, Christopher Rugaber and Tom Krisher
Other·
19 Jul, 2018 04:30 AM6 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Trump has today succumbed to criticism, saying he misspoke and meant to say he didn’t have any reason to doubt Russian interference with the 2016 election.

Having started a trade war with China and enraged US allies with steel tariffs, President Donald Trump is primed for his next fight.

He is targeting a product at the heart of the American experience: cars.

Trump's latest plan is to consider slapping tariffs on imported autos and auto parts — a move he says would aid American workers but that could inflate car prices, make US manufacturers less competitive and draw retaliation from other nations.

The action has also begun to provoke a backlash among member of Congress, who have so far been reluctant to challenge Trump policies that are upending decades of US policies.

On Friday, manufacturers, suppliers, car dealers and foreign diplomats will line up to testify at a Washington hearing to try to head off auto tariffs.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

After the hearing, the Commerce Department will decide whether to label imported vehicles and auto parts a threat to America's national security and whether to recommend tariffs to the president.

In announcing the auto investigation in May, Commerce Secretary Wilbur Ross had said, "There is evidence that, for decades, imports from abroad have eroded our domestic auto industry."

Yet even General Motors, which ostensibly would benefit from a tax on its foreign competition, is opposed to Trump's plan.

Advertisement
Advertise with NZME.

And even considering the administration's trade war with China over Beijing's predatory practices in high-tech industries and even after imposing tariffs on steel and aluminum imports from America's closest allies, Trump's auto tariffs raise the ante substantially: The US last year imported US$192 billion ($282.7b) in vehicles and US$143b in auto parts — figures that dwarf the US$29b in steel and US$23b in aluminum imports and the US$34b in Chinese goods the administration has so far hit with tariffs.

"This is really taking it up one gigantic notch," said Mary Lovely, a Syracuse University economist who studies trade. "I do think it may be a bridge too far."

In the Senate, Democrat Doug Jones of Alabama and Republican Lamar Alexander of Tennessee have announced plans to introduce legislation opposing Trump's proposed 25 per cent auto tariffs. Both warned that the tariffs threaten tens of thousands of jobs in their states.

"Foreign automobiles and auto parts are not a threat to our national security," Jones said. "But you know what is a threat? A 25 per cent tax on the price of these imported goods."

Discover more

Business

Aucklanders lash out at QV over housing valuations

22 Jul 12:32 AM
Business

Fitch Ratings tips downgrade for Co-op Insurance NZ

18 Jul 11:45 PM
Business

KiwiBuild registrations show massive demand in Auckland

19 Jul 12:36 AM
Construction

Govt chips in six-figure sum for waterfront project

19 Jul 01:44 AM

Nor is America's auto industry itself crying for help against foreign competition. US auto sales reached 17.2 million last year — the fourth-best haul on record. Since the end of the Great Recession in 2009, US automakers and parts suppliers have added 343,000 jobs.

Despite Trump's threat, the auto trade war might not happen anytime soon, if at all. The president might be angling to use the tariffs to pressure the European Union to lower its own auto tariffs or prod Mexico to agree to a rewrite of the North American Free Trade Agreement more favorable to the United States.

"I'm hoping it's just bluster," said Paul Ritchie, owner of Honda and Kia dealerships in Maryland and Pennsylvania.

"I understand where the administration is coming from. Our trade imbalances should be corrected. I'm not sure you can take 25-30 years of neglect on trade imbalances and try to fix it in six months."

Even if the auto tariffs aren't just a negotiating ploy, it could take time before they kick in: It took 10 months for the steel and aluminum tariffs — also justified on national security grounds — to go from proposal to reality.

In targeting steel, aluminum and perhaps autos, the administration has weaponized an obscure provision of trade policy: The Trade Expansion Act of 1962 empowers a president to impose unlimited tariffs on particular imports if the Commerce Department finds that those imports threaten national security.

Advertisement
Advertise with NZME.

The administration has defined national security broadly, suggesting that anything that hurts US economic competitiveness damages national security — "an argument you can apply to any industry you want," noted Philip Levy, senior fellow at the Chicago Council on Global Affairs and a former White House trade adviser.

Automakers, in the meantime, have warned that tariffs would raise their costs — and their customers'.

In comments filed with the government, GM warned that that "increased import tariffs could lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less —not more — US jobs."

Even companies that build cars in America rely on imported parts that would be subject to the tariffs, thereby raising automakers' costs.

"There is no automaker that has 100 per cent exclusively US-sourced parts," said Brian Krinock, Toyota's senior vice president for North American factories. "It is a global business with global operations."

Toyota manufactures nine models in the United States, all of which use some imported parts. About 30 per cent of the Camry's parts are imported, Krinock said, and a 25 per cent tariff on those parts would raise the cost of a Camry by US$1,800.

Advertisement
Advertise with NZME.

The Toyota Sienna, made in Princeton, Indiana, would be nearly US$3,000 more expensive, he said, and the Tundra pickup truck, made in San Antonio, Texas, would cost US$2,800 more.

Car collectors, too, have written to Commerce to express their opposition to the tariffs.

"I have been a lifelong car enthusiast, and old cars pose no threat to national security. Neither do their parts," wrote Mark Gillett of Dallas, urging Commerce to exempt cars and parts "of a certain age."

Adam Posen, president of the Peterson Institute for International Economics, estimated that the tariffs would raise auto prices overall by 9 per cent to as high as 21 per cent for luxury models. They would cut the industry's output 1.5 per cent and cost 195,000 jobs, a Peterson analysis found.

Then there's the threat of retaliation from US trading partners. Toyota exports eight US-made models to 31 countries; those exports could be hit by retaliatory tariffs, Krinock said.

Nearly 98 per cent of the cars and trucks that would be hit by the tariffs are imported from US allies: The European Union, Canada, Japan, Mexico and South Korea. If all those countries retaliated by slapping their 25 per cent duties on US car exports, it would deepen the impact on the US economy and cost up to 1.2 million jobs in the United States, Posen estimated.

Advertisement
Advertise with NZME.

The Commerce Department originally set two days of hearings about the proposed auto tariffs, but then cut that to one day. Posen said that cutting back on the time for industry representatives to testify suggests the administration already expects to impose the tariffs.

"This is something where they predetermined the outcome," he said.

- AP

Save

    Share this article

Latest from Business

Premium
Business

Venture capital market hot again, Icehouse Ventures boss says, as new fund feeds on golden visas

Premium
Media Insider

'Game-changer': MediaWorks wins massive AT advertising contracts for buses, shelters, stations

Premium
Airlines

Flight on time: Airlines' performance ranked in new global report


Sponsored

Tired of missing out on getting to global summits to help grow your business?

Advertisement
Advertise with NZME.

Latest from Business

Premium
Premium
Venture capital market hot again, Icehouse Ventures boss says, as new fund feeds on golden visas
Business

Venture capital market hot again, Icehouse Ventures boss says, as new fund feeds on golden visas

A new seed fund raises half of its $30m target in a month.

15 Jul 05:00 PM
Premium
Premium
'Game-changer': MediaWorks wins massive AT advertising contracts for buses, shelters, stations
Media Insider

'Game-changer': MediaWorks wins massive AT advertising contracts for buses, shelters, stations

15 Jul 08:10 AM
Premium
Premium
Flight on time: Airlines' performance ranked in new global report
Airlines

Flight on time: Airlines' performance ranked in new global report

15 Jul 07:01 AM


Tired of missing out on getting to global summits to help grow your business?
Sponsored

Tired of missing out on getting to global summits to help grow your business?

14 Jul 04:48 AM
NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP